APEX (HFT Firm) Clearing for C2BROKER Raises Questions

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Free commissions are a good thing and I commend Rod and Matthew for developing this service, as it probably works very well for swing traders like me. I am not so sure about more frequent and day traders though…

I think people intuitively know that if something is free, there’s usually an exchange further down the line. If there’s a website, there’s an advertisement. If flight tickets are inordinately cheap (like Spirit), we intuitively know we’re making a trade off. So it’s pretty natural to ask, how does a free broker like Robinhood, or C2BROKER make money?

People should read this - and start a more holistic conversation on free brokers (always check the clearing firm, in this case APEX = HFT Firm) here and other trading forums…

Robinhood’s Exceptionally Clever Business Model = Arbitraging Privacy
Robinhood offers free trading, but free doesn’t mean costless.
APEX is also C2BROKER clearing firm, which raises questions, esp for frequent traders…

“If we take a balanced look at their [Robinhood] business, Robinhood seems to make money by selling your orders to high frequency trading firms… Intuitively, you probably don’t want your trading orders to be read by someone else (especially if they could act as a counterparty), because if they know you’re a buyer, they can probably inch their offer up slightly and shave a bit of money out of your purchase.”

Full article here…

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Yup its called pimpin your order. As you said if your swing trading and capturing dollars the effect will be minimal.
If your intraday scalping you are chum in the water. This model is nothing new. I believe Ameritrade was one of the first to do this back in the late 90’s. Sad really. Most newbies wont have a clue as i didnt many moons ago. Not sure why its still legal. Their ability to see orderflow is an unfair advantage imho.

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Selling order flow information should be outright illegal. They are working with inside information that no one else has. I definitely would not participate in any arrangement that displays my order . Free commission will cost you down the line as a trader in the form of trades not executing on limit orders due to lack of liquidity taken by HFT ahead of you ( They saw your order and bought ahead of you) or in the form of exaggerated slippage on market orders. Either way NO THANKS. not a professional trading arrangement.

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